- 1 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 224 OF 2025 BETWEEN: M/S KPR CONSTRUCTIONS G6, ARUNODAYA APARTMENTS STREET No.1, TARANAKA SECUNDERABAD – 500007 REPRESENTED BY ITS MANAGING PARTNER SRI. K. PONNA RAO. …PETITIONER (BY SRI. VASU DEVA NAIDU S.,ADVOCATE) AND: 1. THE UNION OF INDIA REP. BY THE GENERAL MANAGER SOUTH WESTERN RAILWAY GADAG ROAD, HUBLI – 560 023 Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 2. THE CHIEF ADMINISTRATIVE OFFICER CONSTRUCTION, SOUTH WESTERN RAILWAY, 18 MILLERS ROAD, BANGALORE-560046 3. THE CHIEF ENGINEER /CONSTRUCTION/HUBLI, SOUTH WESTERN RAILWAY, CLUB ROAD, HUBLI – 580 023 …RESPONDENTS (BY SMT. RESHMA K T., ADVOCATE) THIS CMP IS FILED UNDER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT A SOLE ARBITRATOR TO RESOLVE THE DISPUTES AND OUTSTANDING ISSUED BETWEEN THE PARTIES IN ACCORDANCE WITH THE PROVISIONS OF AGREEMENT BEARING NO.CAO/CN/BNC/74189/A121/III/17 DATED 20.03.2017 MARKED AS ANNEXURE - C CLAUSE AT 64 OF SCC IN CONFORMITY WITH PROVISIONS UNDER SEC.12(5) R/W SCHEDULE 7 OF ARBITRATION AND CONCILIATION (AMEND) ACT, 1996 IN THE INTEREST OF JUSTICE AND EQUITY. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER 1. This Civil Miscellaneous Petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) seeking for the appointment of the Arbitrators to resolve the disputes between the parties in accordance with the Agreement dated 20.03.2017 at Annexure C in conformity with the provisions under section 12(5) r/w schedule 7 of the Act. 2. Brief facts, leading rise to the filing of this Petition are as follows: 3. Respondent No. 2 had called for tenders vide E-Tender Notice dated 27.05.2016 for the work of Gadag - Hotgi Doubling – Substructure of 2 major Bridges. In response to the said tender notice, the petitioner submitted its tender and became successful lowest eligible tenderer and the same was accepted by the respondent and was awarded to the petitioner vide its acceptance letter dated 05.10.2016. In terms of the - 4 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 Acceptance letter, the approximate value of the work was Rs. 53,94,42,241/- and that the work should be completed within 24 months from the date of acceptance letter i.e., the work should be completed on or before 04.10.2018, however the same was extended subsequently. Further, the agreement was entered into by the parties on 20.03.2017 and the same is governed by the General conditions of the Contract. The work could not be completed even after lapse of 63 months against the original period of 24 months and the respondents railways did not finalize the location and provide the site in terms of scope of contract for completing the balance work. The respondents held the legitimate amount of the petitioner and prevented the petitioner from participating in future tenders. Subsequently, the petitioner invoked arbitration clause and issued the arbitration notice dated 09.08.2021. In response to the said notice, the respondents addressed the a letter dated 16.12.2021 furnishing the names of - 5 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 Retd. Officers as Arbitrators. Further, the petitioner vide letter dated 22.12.2021 refused to choose its nominee from the list furnished by the respondents for the reason being that they are party to the agreement. The petitioner aggrieved by the inaction on the part of the respondents filed a CMP in 338/2022 for the appointment of the Arbitrators. This court disposed of the CMP on 05.12.2022 directing the petitioner to choose two names from the panel submitted by the respondents. The petitioner vide letter dated 23.09.2024 suggested the names of the Arbitrators. In response of which, the respondents issued a letter dated 14.10.2024 stating that the arbitration file has been returned to construction department without nomination of arbitral tribunal due to non submission of nominee contractor. Hence, this petition. 4. Heard the arguments of the learned counsel for the petitioner, and the learned counsel for the respondents. - 6 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 5. Learned counsel for the petitioner submits that the dispute arose between the parties to the petition regarding the completion of the construction work within time bound and withholding of amount with the respondents. The said dispute is arbitral in nature. The petitioner invoked the arbitration clause by issuing the Arbitration notice, however there was in action on the part of the respondents. He submits that there is an arbitration clause at clause 63 and 64 of the GCC which is inclusive of the Agreement entered into between the parties to the petition and the matter has to be referred to the Arbitration. Accordingly, on these grounds prays to allow the petition. 6. Per contra, learned counsel for the respondents submits that the arbitration file has been returned to the department for non submission of the contractor nominee and also submits that the dispute which has arisen between the parties to the petition is not arbitral in nature. Accordingly, prays to dismiss the petition. - 7 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 7. Perused the records and considered the submissions of the learned counsel for the parties. 8. The point that would arise for consideration is as follows: “Whether the petitioner has made out a ground to refer the dispute to the Arbitration in terms of clause 63 and 64 of the General conditions of the contract inclusive of the Agreement dated 20.03.2017 as per the provisions of the Act and the Rules?” 9. It is undisputed that Respondent No.2 issued a E Tender notice and the petitioner was the successful lowest eligible tenderer. Further, the agreement was entered into by the parties on 20.03.2017 and the same is governed by the General conditions of the Contract. The work could not be completed even after lapse of 63 months and the respondents held the legitimate amount of the petitioner and prevented the petitioner from participating in future tenders. The petitioner invoked arbitration clause and issued the - 8 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 arbitration notice dated 09.08.2021. . The petitioner aggrieved by the inaction on the part of the respondents filed a Civil Miscellaneous Petition in CMP No.338/2022 for the appointment of the Arbitrators. This court disposed of the CMP on 05.12.2022 directing the petitioner to choose two names from the panel submitted by the respondents. The petitioner vide letter dated 23.09.2024 suggested the names of the Arbitrators. In response of which, the respondents issued a letter dated 14.10.2024 stating that the arbitration file has been returned to construction department without nomination of arbitral tribunal due to non submission of nominee contractor. 10. I have perused the Arbitration clause i.e., clause 63 and 64 of the general conditions of the Contract, inclusive of the Agreement dated 20.03.2017, which reads as follows: - 9 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 “22.. SETTLEMENT OF DISPUTE - INDIAN RAILWAY ARBITRATION RULES: 22.1 The tenderer/contractor cannot claim any compensation in case any of his llabour, machinery etc. idle due to extigencies such as execution of contract, land acquisition etc. 22.2 (Clause 63 of GCC): Matters finally determined by the Railway. All disputes and differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the Contractor to the General Manager and the General Manager shall within 120 days after receipt of the Contractor's representation make and notify decisions on all matters referred to by the Contractor in writing provided that matters for which provision has been made in Clauses 8,18, 22(5), 39,43(2), 45(a) 55, 55-A(5), 57, 57-A, 61(1), 61(2) and 62(1) to xiii) B of the General Conditions of contract or in any clause of the special conditions of contract shall be deemed as ‘excepted matters’ (matters not arbitrable) and decisions of the Railway authority, thereon shall be final and binding on the contractor provided further that - 10 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 "excepted matters" shall stand specifically excluded from the purview of the arbitration clause. 22.3 (Clause 64 (1) of GCC) Demand for Arbitration: In the event of any dispute or different between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account, or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the “excepted matters” referred to in clause 63 of these conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters, shall demand in writing that the dispute or differences be referred to arbitration. The demand for arbitration shall specify the matters, which are in question or subject of the dispute or difference as also the amount of claim/itemwise. Only such dispute(s) or difference(s) in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration - 11 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 and other matters shall not be included in the reference. (a) The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway. (b) The Claimant shall summit his claim stating the facts supporting the claim alongwith all relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal (c) The railway shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal, thereafter unless otherwise extension has been granted by the tribunal (d) Place of arbitration: The place of arbitration would be within the geographical limits of the division of the Railway where the cause of action arose or Headquarters of the concerned Railway or any other place with the written consent of both the parties. (iii) No new claim shall be added during proceedings by either party. However party may amend or supplement the original claim or defence thereof - 12 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 during the Course of arbitration proceedings subject to acceptance by the Tribunal having due regard to the delay in making it. (iv) if the contractor(s) does/do not prefer his/their specific and final claims in writing within a period of 90 days of receiving the intimation from the Railway that the final bill is ready for payment, he/they will be deemed to waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract is respect of these claims. 22.4 (Clause 64(2) of GCC) Obligation during pendency of arbitration: Work under the contract shall, unless otherwise directed by the Engineer, continue during the arbitration proceedings, and no payment due or payable by the Railway shall be withheld on account of such proceedings, provided, however, it shall be open for Arbitral Tribunal to consider and decide whether or not such work should continue during arbitration proceedings. 22.5 (Clause 64(3) of GCC) Appointment of Arbitration Tribunal. - 13 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 (a)(1) In cases where the total value of all claims in question added together does not exceed Rs. 10,00,000/- (Rupees Ten lakh only), the Arbitral Tribunal shall consist of a sole arbitrator who shall be a gazetted officer of Railway not below JA grade nominated by the General Manager in that behalf. The sole arbitrator shall be appointed within 60 days from the day when a written and valid demand for arbitration is received by the General Manager. (ii) In case not covered by Clause 64(2)(a)(1), the Arbitral Tribunal shall consist of panel of three Gazetted Railway officers not below, JA grade оr two gazetted Officers not below JA grade and a retired Railway officer, retired not below the rank of SAG Officer, as the arbitrators. For this purpose, the Railway will send a panel of more than 3 names of Gazetted Railway officers of one or more departments, of the railway, which may also include the name(s) of retired Railway Officer (s) empanelled to work as Railway Arbitrator to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the General Manager. Contractor will be asked to suggest to the General Manager atleast 2 names out of the panel for appointment as the Contractors nominee within 30 days from the date of despatch of the request by Rai1way. The General manager - 14 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 shall appoint atleast one out of them as the contractors nominee and will, also simulataneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the "Presiding Arbitrator” from amongst the 3 Arbitrators so appointed. General Manager shall complete the exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of Contractor's nominees. While nominating the arbitrators it will be necessary to ensure that one of them is from Accounts Department. An Officer of Selection Grade of the accounts Department shall be considered of equal status to the officers in SA grade of other Departments of the railway for the purpose of appointment of arbitrators. (iii) If one or more of the arbitrators appointed as above refuses to act as arbitrator, withdraws from his office as arbitrator, or vacates his / their office/offices or is/are unable to or unwilling to perform his functions as arbitrator for any reason whatsoever or dies or in the opinion of the General Manager fails to act without undue delay , the General Manager shall appoint new arbitrator/arbitrators to act in his/their place in the same manner in which the earlier arbitrator/arbitrators had been appointed. Such - 15 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 reconstituted Tribunal may at its discretion, proceed with the reference from the stage at which it was left by the previous arbitrator(s). (iv) The Arbitral Tribunal shall have power to call for such evidence by way of affidavits or otherwise as the Arbitral tribunal shall think proper, and it shall be the duty of the parties hereto to do or cause to be done all such things as may be necessary to enable the Arbitral Tribunal to make the award without any delay. The arbitral tribunal should record the day to day proceedings. The proceedings shall normally be conducted on the basis of documents and written statements. (v) While appointing arbitrator(s) under Sub-Clause (i), (ii) and (iii) above, due care shall be taken that he/they is/are not the one/those who had an opportunity to deal with the matters to which the contract relates or who in the course of his/their duties as railway servant(s) expressed views on all or any of the matters under dispute or differences. The proceedings of the Arbitral Tribunal or award made by such Tribunal will however, not be invalid merely for the reasons that one or more arbitrator had, in the course of his service, opportunity to deal with the matters to which the contract relates - 16 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 or who is in the course of his/their duties, expressed views on all or any of the matters under dispute. (b) (i) The arbitral award shall state itemwise, the sum and reasons upon which it is based. The analysis and reasons shall be detailed enough so that the award could be inferred therefrom. (ii)The party may apply for corrections of any computational errors, any typo-graphical or clerical errors or any other error of similar nature occurring in the award and interpretation of a specific point of award to tribunal within 60 days of receipt of the award. (iii)A party may apply to Tribunal within 60 days of receipt of award to make an additional award as to claims presented in the arbitral proceedings but omitted from the arbitral award. 22.6 Clause 64(4) of GCC: In case of the tribunal, comprising of three members, any ruling or award shall be made by a majority of members of the tribunal in the absence of such a majority, the views of the presiding Arbitrator shall prevail. 22.7 Clause 64(5) of GCC: Where the arbitral award is for the payment of Money, no interest shall - 17 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 be payable on whole or any part of the money for any period till the date on which the award is made. 22.8 Clause 64(6) of GCC: The cost of arbitration shall be borne by the respective parties. The cost shall inter-alia include fee of the arbitrator(s) as per the rates fixed by the railway Board from time to time and the fee shall be borne equally by both the parties. Further, the fee payable to the arbitrator(s) would be governed by the instructions issued on the subject by railway Board from time to time irrespective of the fact whether the arbitrator(s) is/are appointed by the railway Administration or by the court of law unless specifically directed by Hon'ble Court otherwise on the matter. 22.9 Clause 64(7) of GCC: Subject to the provisions of the aforesaid, arbitration and conciliation Act, 1996 and the rules thereunder and any statutory modifications thereof shall apply to the arbitration proceedings under this clause. 11. From the perusal of the Arbitration clause, it is clear that, in the event of any disputes or differences of any kind whatsoever arising out of or in connection with the contract, the same shall be referred to the arbitration. - 18 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 12. Admittedly, the dispute arose between the parties to the petition regarding the time bound in completion of the construction work and withholding of the petitioners amount with the respondents. The Petitioner invoked the arbitration clause by issuing the notice dated 09.08.2021. Further there was inaction on the part of the respondents in concurring to the nomination of Arbitrators. Admittedly, there is an arbitration clause, and the dispute has to be resolved by reference to the Arbitration. Therefore, the petitioner has made out a ground to refer the matter to the Arbitration. Accordingly, I answer the point in the affirmative. 13. In view of the above discussion, I proceed to pass the following order: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Shri. Sunil Kumar Gupta, Retd Director/IRIDM, Shri. Desh Ratan Gupta, - 19 - HC-KAR NC: 2026:KHC:5231 CMP No. 224 of 2025 Retd PCE/SR and Shri S. Muralidaran, retd. CSTE/SER/GRC are nominated as the arbitrators to resolve the dispute between the parties to the petition as per the provisions of the Act and the Rules. iii. The Registry is directed to communicate copy of this order to the learned Arbitrators and the Director, Arbitration and Conciliation center, Bengaluru. iv. Pending applications(s), if any, shall stand disposed of accordingly. Sd/- (ASHOK S.KINAGI) JUDGE SKS (Online) CT:KHV